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Saturday, May 21, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

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Cronos releases delayed Q3 results, adds US$236.1M impairment charge

Company stock hit a 4-year low on Friday

Cronos releases delayed Q3 results, adds US$236.1M impairment charge
The company has a CBD skincare brand with actor Kristen Bell. Image via Happy Dance

Cannabis producer Cronos Group Inc. (TSX: CRON) (Nasdaq: CRON) is now current again with its financial filings, after a delay in releasing its third-quarter results announced in November.

At the time, the firm said it was expecting to add an impairment charge of US$220 million to its second-quarter results. It had also received a delinquency letter from the Nasdaq Stock Market, and issued a management cease trade order which should lift two days from now.

On Friday, Cronos said it was restating its second-quarter results, adding an impairment charge of US$236.1 million.

The company also released its results for the three months ended Sept. 30, with sales up 52 per cent to US$20.4 million from US$13.4 million in the second quarter.

Read more: Cronos continues to tumble after receiving Nasdaq delinquency letter

Adjusted earnings before interest, taxes, depreciation and amortization sank 44 per cent to negative US$46.8 million from negative US$32.6 million.

But the firm reported net income rising 37 per cent to US$77.7 million from US$56.8 million. In the third quarter, Cronos reported $132.9 million in income from gains on revaluation of derivative liabilities.

The company ended the quarter with US$842.6 million in cash.

“We are pleased that the audit committee has completed its evaluation, and that Cronos Group is now current with the filing of our financial reports,” CEO Kurt Schmidt said in a statement.

“As we move forward, we are committed to improving our internal controls and financial reporting practices, maintaining the highest standards of transparency and accountability, and enhancing our capabilities and resources across functions to support our strategy.”

Schmidt also mentioned a “strategic realignment initiative” involving management cuts that is expected to lead to US$20–25 million in cost savings this year.

Company stock fell 6 per cent on Friday to $4.49 on the Toronto Stock Exchange. That’s the lowest share price since Dec. 7, 2017, a four-year low.

 

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